A big 5%+ down day is way overdue

Since 2002, there hasn't been one of these big market down days. It is long overdue, and if it happened this week, it would crush a ton of longs. There are so many put seller hedge funds and dip buying retail traders that it would definitely clear out the landscape of the overoptimistic.

The bull market lasted for 5 years, the bear has returned. Its not going away in 2 months like '98, that's a fantasy. Its going to be one of those long drawn out bear market that just wears people out until they get sick of investing in stocks.

Since 2002, there hasn't been one of these big market down days. It is long overdue, and if it happened this week, it would crush a ton of longs. There are so many put seller hedge funds and dip buying retail traders that it would definitely clear out the landscape of the overoptimistic.

The bull market lasted for 5 years, the bear has returned. Its not going away in 2 months like '98, that's a fantasy. Its going to be one of those long drawn out bear market that just wears people out until they get sick of investing in stocks.

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Explain why it won't be like 98 and will instead be a long bear market.

I don't see a '98 scenario because back then the problems were not US related, they were coming from Asia and Russia, which caused the LTCM collapse. Also earlier this year in March, the problems were from China's stock market going down a bunch in one day, not a problem in the US.

In '07, its a completely different ballgame. The problems are literally right at home. People talk about it being a subprime problem and the contagion from that spreading to other credit markets. In actuality, the subprime crisis is an offshoot of firms becoming overleveraged, having lax lending standards, and basically encouraging home speculation. There is still a lot of pain, in fact, most of the pain is in front of us with the reset of a load of teaser rates on the 2/28 mortgages vintage 05 and 06 hitting the market in earnest soon this year till late 08.

As for 1990, I don't see that scenario, stocks were WAY cheaper back then, and people still didn't consider stocks a bedrock of their portfolios like they have the past few years.

you're correct this won't end until we get a huge 5-10% 1 day capitulation move down

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No, this one won't end in a big capitulation, it will be more like in '02, where people just got tired of stocks and threw in the towel not in one fell swoop, but in steps. A 5% down day will be one o f those steps.

Since 2002, there hasn't been one of these big market down days. It is long overdue, and if it happened this week, it would crush a ton of longs. There are so many put seller hedge funds and dip buying retail traders that it would definitely clear out the landscape of the overoptimistic.

The bull market lasted for 5 years, the bear has returned. Its not going away in 2 months like '98, that's a fantasy. Its going to be one of those long drawn out bear market that just wears people out until they get sick of investing in stocks.

More...

I love people like you I just cleaned up getting long the SPI best trade ever in 15 years buy the market as it starts to retrace back up and you will be laughing I know I am. These markets will proabaly finish close to positive this could be the floor in the market get in while you can